Swift Transportation Co. said today, Nov. 27, its special committee of directors has rejected an offer from Swift’s largest shareholder, Jerry Moyes, to acquire the company for $29 a share cash. The Phoenix-based trucking company said its Special Committee determined the offer is inadequate, and that it will begin talks with Moyes and his financial adviser to determine if the price can be increased.
The Special Committee is comprised of Jock Patton, who is serving as chairman, David Goldman and Paul Mecray, each an independent director of the company. The group said its decision was made after careful review, and based in part on the advice and analysis of its financial adviser, Goldman, Sachs & Co. The Special Committee said it continues to explore alternatives to maximize value for shareholders and, with the assistance of its financial adviser, also has begun discussions with other potential financial and strategic buyers for Swift.
“The Special Committee does not believe the current proposal from Jerry Moyes adequately reflects the full value of Swift’s franchise, industry-leading position, recent significant performance improvements and opportunities ahead,” Patton said. Swift said that there can be no assurance that discussions with Moyes or other parties will result in any specific transaction. The Special Committee said it intends to act expeditiously, but there is no timetable for its discussions with Moyes and other parties.
On Nov. 6, Moyes, a former chairman and chief executive of Swift, sent a letter to Swift executives notifying them of his intent to buy the company and take it private. With a total of 75.9 million shares outstanding, the total value of the offer was about $2.17 billion. In the letter, Moyes said he had a commitment from Morgan Stanley for the entire amount of debt financing needed to fund the transaction. Moyes also stated that the offer would remain on the table through Nov. 20. On Nov. 17, Moyes extended that deadline to Nov. 27 in a filing with the Securities and Exchange Commission.
The International Brotherhood of Teamsters later came out against Moyes’ offer to acquire Swift Transportation. In a letter to Patton dated Nov. 17, Teamsters General-Secretary Treasurer C. Thomas Keegal said, “as active long-term shareholders of Swift Transportation Co., we have followed the recent actions of former chairman Jerry Moyes with great concern.”
The Teamsters called on the board of directors to: “reject the offer of $29 per share as too low; make no disclosures of material nonpublic information to Mr. Moyes unless and until such time as he provides a credible, fully financed offer that reflects the true value of our company; review Mr. Moyes’ continuing directorship in light of his pending acquisition of Central Freight to determine whether it is legal, appropriate, and in the best interests of Swift shareholders; disclose the composition of the special committee; and, provide an opportunity for the IBT General Fund to present our analysis of the proposed transaction to the Special Committee.”
According to separate lawsuits filed in Maricopa County Superior Court, shareholders Milton Pfeiffer and Audrey Molinari believed that offer was paltry and didn’t represent the potential of the company. The $29 share price was “unconscionable, unfair and grossly inadequate,” according to Molinari’s lawsuit. Moyes “can influence the management and operations of the company in order to squeeze out the public shareholders and obtain the public shares for itself at an unfair price and unfair terms,” according to Pfeiffer’s lawsuit.
